Apple faces class-action lawsuit over Apple Pay
Yahoo Finance legal reporter Alexis Keenan breaks downs the class-action lawsuit against Apple alleging obstruction of competition from third-party e-commerce platforms and transaction fees.
Video transcript
ALEXIS KEENAN: Hi, Rachelle. Yes, today, in federal court in San Jose, California, a group of US credit and debit card issuers have filed a lawsuit against Apple. And they're seeking class action certification. It's an antitrust case. And what they say is that Apple is illegally blocking app developers from competing in the mobile wallet market. They say that Apple is doing this by keeping them from using both the company's software, as well as the company's hardware, for near field communication technology.
They say that would allow them and others to use different wallets. If you can think about the way that if you have an iPhone, the way that you use your iPhone, the payments platform. What they're talking about here is that tap and pay feature, where you can pay using Apple Pay on mobile devices, or they're also talking about here e-commerce payments. Those are the ones made online and through apps.
They're also arguing that the company should not be legally allowed to bundle those services together, that they should not make issuers of credit cards have to choose both of those things. They also point to Android's system and say that Google doesn't charge any of these fees. And they also point to the EU that has recently cracked down and been investigating this Apple Pay and mobile payments platform more largely.
Now, if you take a look at the fees that Apple charges to US card issuers, you have 0.15% for credit card transactions. You also have a flat fee of 0.5-- of $0.05, rather, for debit card transactions. And they say that Apple's estimated revenue for these charges in 2019 fell at a billion dollars. And they say that's supposed to be four-fold by 2013, so looking at $4 billion prospectively there. They say that's all on their shoulders and that this is an antitrust violation. And more apps should be able to compete in this space.
RACHELLE AKUFFO: Well, thank you for getting us up to speed. Yahoo Finance's own Alexis Keenan.
